Market Insider

US oil prices surge on expectations of supply drop

Anna Lubovedskaya | E+ | Getty Images

West Texas Intermediate crude oil futures have surged to a one-month high on expectations for the first decline in weekly U.S. crude supplies in nearly three months as well as news that a key pipeline will begin service at the start of the year, relieving the glut of oil in the middle part of the country.

Nymex WTI oil futures climbed more than $2 a barrel to reach a session high of $96.04 a barrel. Front-month WTI futures have not settled above the $96-a-barrel mark since Oct. 31. Brent crude oil futures rose more modestly, up about $1 to a session high of $112.70 a barrel.

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News that TransCanada's 700,000 barrel a day pipeline taking crude from the main physical delivery point for the WTI oil futures in Cushing, Okla., to Port Arthur, Texas, on the Gulf Coast will begin service on Jan. 3 helped to spark Tuesday's move in the benchmark U.S. oil price.